Mobile Market and Network Planning - Part 3

1.1         Lagging Revenue Growth

·         To date, operators have been unsuccessful in translating the data-growth into revenue growth resulting in significantly lower top line growth versus data growth. In developed regions, revenue per gigabyte is forecast to fall from USD23.21 in 2010 to USD4.27 by 2015. Moreover, regulatory pressures do decrease roaming prices and mobile termination rates are having a negative impact on voice revenues.

·         Operators are seeking new sources of revenue with changes to current flat-rate pricing to data caps  and tiered-pricing and by introducing a host of new services. New video services, in particular, are popular, but are consuming vast amounts of capacity, requiring the operators to add capacity faster than their revenue is growing.

1.2         Rising Operator Margin Pressure

·         The combination of dramatic traffic growth and slow revenue growth is putting pressure on mobile operator profit margins (see  Figure 2 08D0C9EA79F9BACE118C8200AA004BA90B02000000080000000E0000005F005200650066003200370037003500380031003700310034000000 below) Operators are therefore looking for increased efficiency in capex and opex spend through the optimisation of their networks.

Figure   2: Comparison of the network economics of mobile networks

Mobile Market and Network Planning - Part 2

1           Key Market Trends

1.1         Exponential Growth in Wireless Data

·         Today’s mobile market is undergoing a dramatic transformation driven by the growth in mobile broadband and data-hungry applications such as smart-phones, e-books and i-Pads as well as the introduction of new services, especially video, which consume vastly more bandwidth. Global traffic is forecast to grow at a 48% CAGR from 2010 to 2015, from 225PB per month to 1603PB per month (source: Analysys Mason 2010). This is putting increasing pressure on the network capacity of operators. An example forecast for Western Europe and North America is seen in Figure 1 below. Similar growth pattern is forecast for other regions of the world.

Figure 1:  Mobile Content and Applications revenue by service category and forecast data traffic,
                 2009–2015,  (source: Analysys Mason, 2010)

Western Europe

North America

Mobile Market and Network Planning - Part 1

In 2010, as part of some custom work for a network planning client, I pulled together some information on the overall state of mobile networking and of the mobile network planning business. Now that it is a bit dated, I decided I could release some of this information in my blog. More detailed and updated information is available from Analysys Mason reports (see www.analysysmason.com ).

This is part 1 of a multi-part tutorial on the state of the mobile industry and of mobile network planning.

The mobile telecommunications industry is undergoing a profound transformation driven by a number of underlying industry trends:

·         Tremendous growth in data usage: The rapid growth in data-intensive devices such as smart phones and mobile broadband is driving an exponential surge in data usage and networks are becoming increasingly congested in high-usage urban areas as a consequence.

·         Lagging revenues: Top-line revenue growth is failing to keep pace with this data explosion given the prevalence of “all-you-can-eat” pricing schemes and difficulties in charging for data-hungry applications. The problem is compounded by the negative impact on voice revenues of regulatory reductions in roaming charges and mobile termination rates.

·         Margin pressure: Network costs are outpacing revenue growth and not all forms of data are currently profitable escalating the pressure on operator profit margins and raising the need to justify return on capex investments and reign in opex costs.  

·         Rising end-user expectations: The expectations of end-users around the quality of service and applications are rising in an industry with low customer switching costs; this places competitive pressures on operators to ensure networks have the sufficient bandwidth to deliver high quality data services.

·         Increasing network complexity: The mix in vendor equipment and mobile technologies, compounded by the roll-out of next generation 4G mobile technology due to take place over the next few years, is rendering networks increasingly complex to manage. This is exacerbated by the trend towards network sharing as an effective means of driving down operator costs.  

·         Network management outsourcing shift: The rise in network complexity is forcing operators to outsource network management and optimisation solutions. 

·         Need for effective network management, end-to-end solutions and self-organising networks: The trends outlined above are raising the demand for efficient and effective network planning, management and optimisation. Moreover, the boundaries between planning, optimisation and the delivery of quality of service are blurring, creating a currently unmet need for holistic end-to-end solutions as well as a vision of “self-optimising / self-organising network” (SON) solutions as the future of the industry.